The Inflation Reduction Act (IRA) passed in 2022 offers up to $14,000 in tax discounts and credits for those who invest in renovating their property. The condition is that the renovation includes changes to make the property energy efficient.
Understand how you can take advantage of government incentives:
Electric Appliances
About 17% of homeowners want to renovate their homes to make them more energy efficient, according to a recent survey by Moneywise. But how do you start doing that?
The Biden administration offers a $150 tax credit for an inspector to conduct an energy audit on your home to help you figure that out. Homeowners can receive up to $8,000 in discounts to purchase energy-efficient appliances, depending on their income.
Low- and moderate-income families can receive discounts to cover the total installation cost of new electric appliances, such as heat pump water heaters or clothes dryers.
Insulation
Extreme weather will continue to affect the U.S. As temperatures fluctuate from hot to cold, installing more energy-efficient insulation can save up to 20% on gas bills. And the government can help you with the upfront costs.
Families can receive a 30% tax credit for energy-efficient insulation. This includes a $1,200 credit for “adding insulation or installing efficient windows and doors” and a special $2,000 credit for purchasing “electric heat pumps that provide super-efficient heating and cooling.”
States also offer discounts of up to $8,000 for low- and moderate-income families to purchase and install heat pumps. These families can also receive up to $4,000 in discounts for electrical upgrades to integrate the new heating and cooling system.
Solar Panels
According to a report by Forbes, solar panels and their installation cost on average between $6,600 and $22,800.
The Inflation Reduction Act offers a 30% tax credit for the installation of solar panels between 2022 and 2032. There may also be state incentives to further offset costs.
Zillow, a real estate sales and rental website, found that a home with solar panels has a resale value 4.1% higher than a home without energy efficiency, translating to an extra $9,274 for your wallet.
Source: Yahoo! Finance